Correlation Between U Power and Alvotech
Can any of the company-specific risk be diversified away by investing in both U Power and Alvotech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining U Power and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Power Limited and Alvotech, you can compare the effects of market volatilities on U Power and Alvotech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in U Power with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Alvotech.
Diversification Opportunities for U Power and Alvotech
Poor diversification
The 3 months correlation between UCAR and Alvotech is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and U Power is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on U Power Limited are associated (or correlated) with Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of U Power i.e., U Power and Alvotech go up and down completely randomly.
Pair Corralation between U Power and Alvotech
Given the investment horizon of 90 days U Power Limited is expected to under-perform the Alvotech. In addition to that, U Power is 2.61 times more volatile than Alvotech. It trades about -0.2 of its total potential returns per unit of risk. Alvotech is currently generating about -0.25 per unit of volatility. If you would invest 1,296 in Alvotech on August 30, 2024 and sell it today you would lose (128.00) from holding Alvotech or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. Alvotech
Performance |
| Timeline |
| U Power Limited |
| Alvotech |
U Power and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Alvotech
The main advantage of trading using opposite U Power and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Alvotech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alvotech will offset losses from the drop in Alvotech's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Alvotech vs. Ikena Oncology | Alvotech vs. Eliem Therapeutics | Alvotech vs. HCW Biologics | Alvotech vs. RenovoRx |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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